You know the drill... You can refer back to chapters 10 & 11 for a format for this wiki page. The Purchase Process
Is an interacting structure of people, equipment, methods, and controls that is designed to (a) handle the repetitive work routines of the purchasing department and the receiving department; (b) support the decision making for the purchasing and receiving departments; (c)assist in the preparation of internal and external reports.
Internal Perspective - requistiion sent from inventory control department and other departments to purchasing department; purchase order sent to vendor; order notification sent to other department or to inventory management; order notification sent to receiving department; notification sent to A/P process; goods received from vendor; receiving notification sent to A/P and G/L processes; receiving notification sent to purchase department.
SCM - SCM is the system of adding value in each process in the supply chain starting from acquiring raw materials and ending with product field support. SCM software enhances the supply chain in planning and execution.
Supply Chain Management (SCM) Software
Supply chain planning - accumulates data about orders from retail customers, sales from retail outlets, and data about manufacturing and delivery capability to assist in planning for each of the SCM steps. Most valuable and problematic = demand planning software used to determine how much product is needed to satisfy customer demand.
Supply chain execution - automates the SCM steps. ERP software is assigned to this category because it receives customer orders, routes orders to appropriate warehouse, and executes the invoice for the sale. Many of the connections between players in the supply chain are B2B automated interfaces.
Purchase Requisitions
Reordering processes Reorder point (ROP) analysis - Each inventory is unique - reorder point is established with respect to rate of sale - when the on-hand level for an item falls below its specific reorder point, the item is reordered. Economic order Quantity (EOQ) - technique used to analyze all incremental cost associated with acquiring particular items of inventory. The following are inventory carrying costs 1) opportunity cost of investment funds 2) insurance costs 3) Property taxes 4) storage costs 5) cost of obsolescence and deterioration. ABC Analysis - technique for ranking items in a group based on the output of the items. ABC can be used to categorize inventory items according to their importance.
Technology Development in Purchasing
A technology development that has had a significant effect on supply chain management and the purchasing process is radio-frequency identification technology (RFID).
Radi-frequency identification is a chip with an antenna that can send and receive data from and RFID reader. A reader obtains data from the RFID chips. RFID chips contain data about the product it is attached to such as product inventory, product sales, and product pricing. It can be associated to a group of items shuch as a pallet of merchandise or it can be associated to a single item such as an electronic razor.
-Here is a very interesting article I found from C/NET titled: Perpesctive- RFID tags: Big Brother in small packages. http://news.com.com/2010-1069-980325.html//
It describes how RFIDs could be used to better track what we buy, what clothes we wear, and what we eat. Kind of scary, huh?
The Purchase Process
Is an interacting structure of people, equipment, methods, and controls that is designed to (a) handle the repetitive work routines of the purchasing department and the receiving department; (b) support the decision making for the purchasing and receiving departments; (c)assist in the preparation of internal and external reports.
Internal Perspective - requistiion sent from inventory control department and other departments to purchasing department; purchase order sent to vendor; order notification sent to other department or to inventory management; order notification sent to receiving department; notification sent to A/P process; goods received from vendor; receiving notification sent to A/P and G/L processes; receiving notification sent to purchase department.
SCM - SCM is the system of adding value in each process in the supply chain starting from acquiring raw materials and ending with product field support. SCM software enhances the supply chain in planning and execution.
Supply Chain Management (SCM) Software
Purchase Requisitions
Reordering processesReorder point (ROP) analysis - Each inventory is unique - reorder point is established with respect to rate of sale - when the on-hand level for an item falls below its specific reorder point, the item is reordered.
Economic order Quantity (EOQ) - technique used to analyze all incremental cost associated with acquiring particular items of inventory. The following are inventory carrying costs 1) opportunity cost of investment funds 2) insurance costs 3) Property taxes 4) storage costs 5) cost of obsolescence and deterioration.
ABC Analysis - technique for ranking items in a group based on the output of the items. ABC can be used to categorize inventory items according to their importance.
Technology Development in Purchasing
- A technology development that has had a significant effect on supply chain management and the purchasing process is radio-frequency identification technology (RFID).
- Radi-frequency identification is a chip with an antenna that can send and receive data from and RFID reader. A reader obtains data from the RFID chips. RFID chips contain data about the product it is attached to such as product inventory, product sales, and product pricing. It can be associated to a group of items shuch as a pallet of merchandise or it can be associated to a single item such as an electronic razor.
-Here is a very interesting article I found from C/NET titled: Perpesctive- RFID tags: Big Brother in small packages. http://news.com.com/2010-1069-980325.html//It describes how RFIDs could be used to better track what we buy, what clothes we wear, and what we eat. Kind of scary, huh?